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HR Guide to the Fair Labor Act

Jun 14, 2009

Fair Labor Standards Act: A Basic Overview for HR Professionals

In order to be an effective human resources contributor, it is of fundamental importance to have (at a minimum) a basic understanding of the more critical employment laws. While I am not pretending to provide legal advice here, I think it will be helpful to take a few moments to assess one such law.

The Fair Labor Standards Act (FLSA) is, perhaps, the most important piece of employment law ever passed in the United States. The law was first enacted in 1938 and the substantial influence of both labor union and business interests have led to many FLSA adjustments and FLSA amendments - nearly one every year.

Which Areas of the FLSA Are Critical for HR Professionals?

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As this entry is meant to be of practical use rather than a legal discourse, I will focus on the basic items an HR professional really needs to know about the FLSA. It is important for people to know that the fair labor act covers critical areas such as minimum wage, mandatory overtime pay, and the rules that allow an employee to be labeled “exempt” from overtime treatment.

Federal Minimum Wage Law

As with any federal law pertaining to employment law, this act dictates the minimum guarantees for employees, particularly in the area of minimum wage. Understandably, the minimum wage has been adjusted on many occasions since the inception of the law. As of 2009, the federal minimum wage stands at $6.55 per hour. As the federal law serves as only a minimum guarantee for American workers, states and other jurisdictions (such as the District of Columbia) have the right to establish a higher minimum wage in that state.

While minimum wage laws are certainly relevant to those HR practitioners in some industries, this won’t be the subject of my blog. Could anyone stand a discussion about federal minimum wage laws? I’ll save a detailed review of minimum wage specifics for another blog.

Mandatory Overtime Pay

Another major FLSA provision all HR professionals should know about is the standardized workweek of 40 hours. The Fair Labor Standards Act states that a full workweek is 40 hours and all work above that amount is to be paid at time and one-half. Of course, this is only the beginning of the law’s meaning to anyone in human resources.

Those who have worked in a rotating shift environment (oil refineries, paper mills, etc.) know that the 40-hour workweek is from any time of an established day to any time of an established day, one week later. In other words, if an organization sets a work week of 12pm Wednesday to 11:59 am Wednesday, that is acceptable. If you then have an employee working 10 hours on Thursday, two hours on Friday, 12 hours on Saturday, and 16 hours on Tuesday, that person is not due any overtime pay. Any combination that adds up to 40 hours or less would not be entitled to overtime. Of course, this demonstration is not a recommendation to create crazy schedules!

Most companies, however, pick the weekend as the beginning and end of a workweek since most people work Monday through Friday. The point of this discussion is to convey the liberty you actually have as an organization in setting your workweek. The FLSA only cares that if an individual works over 40 hours within your set workweek, the person receives time and one-half pay.

In some settings, employees can receive more than time and one-half on Saturday or Sunday. This is not a FLSA requirement for employers. Remember that this federal labor law addresses minimums – you can always choose to pay in a more generous manner. In some, typically unionized, settings, you may see double time requirements for Sunday work – regardless of a Saturday-to-Saturday or Sunday-to-Sunday workweek.

While this is a discussion of a particular federal law, it should be noted that a number of states have more worker-friendly labor laws that require overtime pay for work over eight hours on any given day. This adds another layer of complication when managing your workforce and setting up work schedules.

When Are Employees Exempt from Overtime Pay?

In 2009, the area of the Fair Labor Standards Act that requires the most expertise and input from HR professionals is the topic of exemptions. For many people, the word “exemption” comes across as a word meant only for lawyers. I found it easy to move past this point by realizing that employees are either “exempt” from receiving overtime pay or they are “non-exempt” from receiving overtime pay.

Another way to look at the topic of exemptions that I have found helpful is to think of all employees being “born” non-exempt. It is up to the company to establish job duties that prove they are performing their positions in a manner that is consistent with the list of exemption requirements listed on the FLSA.

A detailed discussion on the actual wording of the various FLSA exemptions and the practical management of exempt versus non-exempt job responsibilities is expansive enough to fill my next blog. I can sum up a preview of the blog by stating simply that everything centers on what tasks the person is actually performing, not what you told them to do and not what is on the job description. Therefore, you need to ensure that employees are effectively managed – another topic for a blog!

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